Dr. Michael Hinojosa, who came to Cobb from the Dallas Independent School District in Texas, stepped in as the county system’s new superintendent on July 1. He visited the Journal for a wide-ranging interview last week and discussed where the district stands nationally and if a Broad Prize could be in its future, the logic behind choosing block or traditional scheduling, how justified the battle is between the balanced or traditional calendar and how to fight the district’s anticipated $72.2 million deficit for the 2012-13 school year. MDJ file photo

MARIETTA — Cobb schools officials aren’t happy about a tax break for a wealthy developer’s $103 million project that could take away as much as $756,000 annually from county schools.

Riverwalk, a mega-development to include 236 condos, 14 three-story townhomes and a 10-story office tower, will be the recipient of a property tax subsidy from the Development Authority of Cobb County.

The project didn’t meet the county’s requirements of creating 25 jobs and contributing $500,000 to the tax digest, but the Development Authority is moving ahead anyway with waiving property taxes. It has the authority to act on its own when offering tax abatements.

Cobb School District Superintendent Michael Hinojosa said the process is moving too quickly, and he needs time to determine how losing that tax revenue could affect the school system that is facing an $80 million deficit.

The two parcels that make up the 7 acres of undeveloped land are currently valued at about $6.1 million for tax purposes, according to the Cobb County Tax Commissioner’s website. That raw land generated $46,433 for the Cobb School District in 2013 and $26,803 for the county.

But if developed into a $100 million development, as proposed by financial backer John Williams, the site would pump more than 15 times that amount into county coffers, with $436,400 generated for the county and another $756,000 for Cobb schools, according to estimates provided by the county finance office.

But Riverwalk won’t be paying those taxes to the schools and county government if the proposed tax abatement goes through as planned.

Tax assessors deny request for delay

Hinojosa sent a letter to the Cobb Board of Assessors saying he had “only recently learned of this initiative” and “this has the potential to have a significant impact financially on school funding,” but the board opted not to delay action.

Typically, Development Authority projects are filed with the assessors’ office 30 days before action is taken, providing time for review. Though the project was filed on Nov. 20, just 14 days before Tuesday’s meeting, the assessors’ office voted to waive its review period and move forward.

Assessors unanimously voted on Tuesday to approve the method by which the property is made tax exempt. Because the Development Authority is a government agency, it doesn’t pay taxes and Riverwalk’s developers can skirt paying taxes by leasing the property from the authority for 10 years.

Riverwalk will pay no taxes until construction is finished in 2015 and the buildings have been cleared for occupancy. Then it pays on 10 percent of the property value in year three, 20 percent in year four and so on until year 12 when it assumes 100 percent ownership of the property.

Cobb Tax Assessor Stephen White said the board doesn’t have the ability to stop a tax break.

Dan Post, member of the Board of Assessors, said the school board’s concerns don’t impact decisions of the assessors.

“Since I’ve been on the board, this is the first time we’ve ever had this type of communication from the school board,” Post said on Wednesday. “I don’t take the superintendent’s request lightly, but again ... really the question for us today is, ‘Is the valuation presented today correct?’”

Development Authority executive director Nelson Geter said he understands the school system’s worries.

“We understand their concern and, of course, we want to always make sure that the public school systems are as solid as possible and, like I said, I think that we’re in position at this particular point to sit down and listen to their particular concerns,” Geter said.

Balancing economic growth with education

Cobb Schools Chairman Randy Scamihorn said he supports local businesses but is concerned about how quickly the tax deal is progressing. He’s not for or against Riverwalk’s tax break, but wants to learn more about how it could affect education in the county.

“I’m pro-Cobb County development, but we also have to make sure that our school systems have enough money to maintain our excellence in education,” Scamihorn said. “That’s why people want to come here.”

Cobb is attractive, Scamihorn said, because of its well-educated workforce and low taxes.

Hinojosa also pointed to the school system’s $80 million deficit and said either expenses have to be cut or revenue has to be increased.

“On the face of it, it’s not good for us,” Hinojosa said.

It’s about making sure “voices are heard and there’s not any unintended consequences,” Hinojosa said.

“We’re all big fans of economic development. We understand that. We get that,” Hinojosa said. “But at the same time, we want to make sure our schools’ revenue is considered in any kind of economic development.”

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FACTS AND FIGURES

HOW THE DEAL WENT DOWN:

• The Cobb Board of Commissioners approved a re-zoning for the property on Sept. 17, giving John Williams’ Riverwalk development the go-ahead.

• Also on Sept. 17, the Development Authority approved a resolution of intent to issue $103 million in bonds for Williams’ proposed apartment building and office park. Those bonds will allow the authority to purchase the property and lease it back to the developer, who avoids paying property taxes.

• Paperwork seeking property tax breaks was filed with the Cobb Board of Tax Assessors on Oct. 23. The Development Authority met again on Nov. 15 to finalize its approval of the bonds.

A committee of high-ranking county staffers including DOT Director Faye DiMassimo and Michael Hughes, economic development director, denied an incentives request for waiver of permitting fees on Nov. 18.

IS IT A DONE DEAL?

• No. A Cobb Superior Court judge will have the final say when the bonds go up for a validation hearing on Dec. 18, giving an opportunity for the public to challenge the bond deal. If not successfully challenged, the judge will validate the bonds and the tax break will kick in as soon as the Development Authority takes ownership of the property. Closing on the deal is expected before the end of the year.

WHO’S BEHIND IT?

• While Cumberland-based Greenstone Properties is listed as the developer of record for Riverwalk, one of John Williams’ companies is involved as a financial backer.

• Williams founded Post Properties Inc. in 1970 and has directed the development of more than $5 billion in real estate during his career. He led the effort to build the $150 million Cobb Energy Performing Arts Centre and its main theater, The John A. Williams Theatre, is named for him.

Do we want to be the area of low taxes (and high fees?) or do we want to attract business because of our public infrastructure (rail, air, highway, water, power), public support (police, fire, health) and our skilled workforce (public schools, Kennesaw, highlands, chatt tech, so poly, life u)?

John Williams and this is development are so typical of how business at a high level takes place today. The developer, the politicians, the corporate heads and the wealthy who inherited get all the tax breaks and continue to get wealthier. While, the middle class and the working poor work for these groups and pay taxes by the tables.

Yet, these same wealthy and politicians want to up the age of Social Security eligibility, cut benefits, raise the cost of Medicare and take away any deductions like home mortgages.

Funding the playhouses of the well connected off the backs of the middle class and working poor is really getting tiring.

Maybe we shouldn't be such a passive group. Maybe the middle class and the working poor should unite with our rakes and hoes in protest.

While I rarely agree with most comments coming from the school district, if the property is going to provide homes for students and there is no revenue to help cover those costs, then yes, that is an issue. If they all end up section 8, then the students will be title 1 and the schools will get fed money for that. The two main candidates for Governor are promising a new look at the funding for schools in order to gather votes. I expect promises of raises too.

I agree with at least one comment for sure- the district needs to look at every aspect and start cutting unneeded positions. if automation has taken place, get rid of the jobs and not let a person sit waiting for retirement for years. Management- plan, organize, control. All lacking at the top of the central office and every school.

The County is racing to approve $1 Billion in new real estate development in the Cumberland area as fast as possible, pretty much all financed with tax exempt leasehold deals, before anyone notices. The School District is about to get squat in new taxes on all this new development but will still get the new kids. It is a little ironic that this newspaper spent months skewering Williams on the Johnny Walker Homes deal, which was peanuts by comparison to this one and still sits as an empty hole a decade later. Now its "We're home of the Braves" - rah rah start turning dirt!

If not for this newspaper, no one would know of this corrupt deal. Get your b*tching and moaning straight.

Too little, too late

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December 05, 2013

This is ridiculous. CCSD administration and board were completely silent from the time moving the Braves to Cobb and the vote, now they want to complain? Karen Hallacy, the PTA's district legislative chair and Republican lifer Donna Rowe voted in favor of the tax incentive on the Cobb Development Authority. I'm all for free markets, but not personal wealth being generated on the backs of taxpayers AND taking money away from education.

As to Hinojosa's comments - too little, too late. No doubt the Chamber told him sit down and shut up, and he willingly complied. This is just poltical theatre.

Show me a property owner and I will show you a tax payer who is fed up with CCSD's overspending and mismanagement!! The pay and benefits of CCSD employees makes a taxpayers head hurt!

BTW, did you see the latest math test scores from around the world come out this week?

The US ranks near the bottom while Asian countries like CHINA, SOUTH KOREA, JAPAN and many others rank at the TOP. Why don't you "EDUCATORS" talk about that instead of crying in your soup for more tax money!

The salaries and benefits are too much? Are you kidding me? My wife has 30 kids in her classroom, works on weekends, and spends her own money for supplies. She pays $ 550 a month for her insurance and gets paid the days she works, not the days they are off. You walk a mile in her shoes before spouting your mouth. A babysitter gets paid per hour per a child with out teaching anything. That would equate to my wife making $7 per hour x 30 x 7 hours per day. $1470 per a day would be the cost. A daycare charges $600-$800 per month per child. I invite you to step in a classroom for a month and do all the work that is required of them and see if you still feel the same way! Sad that people like yourself have thrown education away and then complain about test scores. I can assure you the immigration issue and welfare babies have been the issue to take this country down the road it is on. Not the teachers!

anonymous

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December 05, 2013

I totally agree with you. Pensions remain for teachers, while they have been cut off for most workers; weeks off at a time; pay that is nothing to complain about at all if you factor in actual days worked; etc. I am tired of crybaby teachers. Government workers have it plenty good. Plenty good. And the part about "low morale" - if I told my boss my morale was low and I couldn't do a very good job because of it, he would tell me take my morale somewhere else and that there are about 200 people standing in line behind me for my job.

anonymous

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December 05, 2013

Hey You Are the Problem, is your wife being forced to work in that horrible hell hole? How about moving her from it?

That said, you are right about the catering to "the hood" and "just crossed the river" cultures from which so many of the kids packed into schools come these days. They have no appreciation or respect for education...it is too white. As a result, our schools are full of a bunch of savage, illiterate mongrels who are largely destined for prison...and, of course, that's all the fault of the white (typically taxpaying)folks in Cobb county.

Another Voter

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December 05, 2013

Kennesaw Voter, please stop trying to pretend that you have a clue as to how school funding works. Please also stop trying to pretend you have a clue about the conditions of teaching. You live in a county with a millage rate below 20 mils. It is not about overspending and mismanagement. It is about something called QBE. How about you cry baby tax payers (no, not everyone in Cobb) learn where the money is going. It is called QBE. The county pays more than 130 million to QBE each year. If that money was not paid, there would be 50 million left over, after the 80 million was paid. Guess what? You don't have a clue. You only think you know how Cobb school operate. However, if you and everyone else who believes that teachers have it made can solve your insecurity problems by griping about school teachers and CCSD, go ahead. Those who know the truth also know you really don't understand that of which you speak.

@ anonymous

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December 05, 2013

You idiot. Teachers have to pay into their pension system for 10 years minimum just to start getting back some of their money, and not before age 60.

Why is it the ones who complain the most about teachers and education are the ones who know the least about the facts? The uneducated shouldn't be allowed to complain about education.

Apparently, ignorance is bitter, not bliss.

Patrick Thompson

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December 06, 2013

Careful what you hear from Faux News and other non-investigative news agencies. Yes, all the US students rank below the "best" in other countries as these other countries don't include their non-collegiate track students in their averages. Public educators deserve our utmost respect with our tax dollars, just as they do in Asian countries, where they are regarded at the top of pay scales and public respect. Your property value is buoyed by the great public schools, infrastructure and amenities in the area.

anonymous

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December 08, 2013

Children, always remember this: If someone calls you an idiot, that immediately flags them as one. Don't ever forget that.

anonymous

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December 05, 2013

RE: Cobb School District Superintendent Michael Hinojosa said the process is moving too quickly, and he needs time to determine how losing that tax revenue could affect the school system that is facing an $80 million deficit.--

How much exactly could the CCSD be "losing"? HAs undeveloped land been bringing big bucks?

Apartments and condos are being developed, which may have children attending public schools. Each student costs money to educate, transport, etc.

Oddly enough, I believe this area is in the Brumby Elementary school district way up on Powers Ferry Road. Brumby is the most overcrowded school in the entire CCPS system. Brumby sure could use that money.

gobacktotexas

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December 05, 2013

Who gives a flip what this yahoo thinks? He has been ineffective since he arrived and has done nothing to improve our situation. Terrible hire.

How it’s going to affect the schools Williams will end up with a bunch of apartments and section eight will be part of the deal to get more money out of the Fed’s than watch the crime rate climb. Mike is mad because he didn’t get to go to the party at the Strand or his cut of the graft money.

Can't the county realize we remain under an old code which is both outdated and ineffective. CCSD cannot survive on property taxes; we are in such high-level debt now. Teachers have had furloughs for over 5 years, a 2.5% overall decrease in salary and less school days which affects students' learning. Please think outside of the box and look at oher coomunities that are striving. What are they doing that Cobb needs to do? If it is broken, fix it.

I am so tired of the "educator" class telling us lack of money is the reason they are graduating kids dumber than door knobs. Sorry. I have seen too many kids from back lands of India, Vietnam and China that will knock the socks off 98% of the grads from CCSD grade wise. Talk about crowded classes. You bet. Fancy tracks, football fields, ipads, "world class performing arts centers", marble top hotdog stands? Nope. ( and do not tell me about how that is funded by a different source...it all comes from the same pocket, Mr. Educator.)

CCSD is NOT managed. The politicos of the CCSD board do not have the gonads to do the budget cutting that private sector people KNOW has to be done. Bottom-line: CCSD can do with less. They just don't want to. They want to dig deeper into Cobb taxpayers pocket. SCREW 'EM!

COBB CSI

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December 05, 2013

This is why the CID’s need to be taken out its crony Republican corporate welfare plain and simple; they all had a party at the Strand you got the bill. Boycott the Strand don’t ever support the Strand at all and Lisa is the only one to keep on the board of commissioners boycott Cumberland mall as well as Galleria these places should have to show the hidden tax that you pay by shopping at a CID AKA corporate welfare business. Welcome to the Republican Fascist Party of Cobb County.

Please stop with the "Republican Fascist" nonsense. Tax breaks to developers are handed out by members of both parties in every city, county, and state in the country as a means to attract development. People like you only complain about them when it is politically convenient.

Estimation

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December 05, 2013

These type of tax breaks are useful in areas that need them. Before the Braves move to Cobb county there might have been a case for the tax breaks.

The property in question has become a golden egg since the Braves announced their relocation and we asbolutley do not need to give the tax break to the developer to continue his development of this property. If promises have been made then I would guess that is another story but the tax breaks should not be given in this case.

I certainly believe that we need good development, but the fact is there is going to be townhouses and condos, with those certainly having school children. It is completely unfair to have us property owners already paying our fair share to carry the burden for others that do not have to pay. I would feel very different if this was a straight up commercial or industrial development with no residential component. The impact the jobs created would be offset and you are not adding untaxed residential to the system.

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